The End of Gas Powered Profits (RRC)

We recently ran a scan of a select, filtered group of stocks that have been exhibiting weakness even as the market bounced higher.

And of those, we zeroed in on four that we felt were tradable.

Beyond that, we checked the options chains of each to determine which, if any, were offering pricing oddities that might accrue in our favor.

And, indeed, out popped one, whose advantages to traders like us are manifold.

Take heed, read on and we’ll explain.

Thank you, Masoud.

And now to the trade…

NATURAL GAS LEAK

Anyone who’s been watching the gas market in the past few weeks knows it’s been a catastrophe.

The question is how exploration and production companies can still hold their heads up in public, given all the jeering and embarrassment they’re facing.

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One company, Range Resources (NYSE:RRC), appears to have had enough.

As the chart below shows, an imminent re-sync-ing of Range Resources stock with the underlying commodity appears at hand.  And that could mean a 5900% return for us in very short order!

But first, be warned, RRC’s fundamentals appear fit as an Appalachian fiddle.

To wit—

• P/E is 5.13,
• Dividend Yield is 1.32%, and
• Price to Book is 2.70.
• That said, next year’s consensus for earnings sees a DECLINE of 21.70%, and…
• Institutions have already lightened their holdings in the last quarter by 5.36%.

Recent warm weather has wreaked havoc on NYMEX gas, but not all stocks have declined in lock step.

As they should.

RRC delivers its next earnings report on February 27^th.

And believe us, they were not expecting the latest pricing fiasco.

The stock WILL fall.

Here’s the daily chart—

All is in the hands of heaven—except fear of heaven.

Get frightened, friend!

Many happy returns!

Matt McAbby

Follow @HughLOHaynew